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Car Insurance Discounts 101
Car Insurance Discounts 101
Taking advantage of car insurance discounts can be one of the best ways to save money on your auto insurance premium. However, in order to get the most out of car insurance discounts, you must understand what is available, the main types, and how to comparison-shop for the best ones.
The Basics of Car Insurance Discounts
Based on which insurance company you talk to, you can find a multitude of car insurance discounts that can reduce your premium, possibly by a significant amount.
There are 3 basic categories of car insurance discounts:
- Vehicle discounts – These discounts relate to the features of your vehicle and often reward savings for equipment that increase safety or decrease environmental impact, such as:
- Passenger-side airbags.
- Anti-lock brakes.
- Passive restraint systems (automatic seat belts).
- Alternative fuel.
- Hybrid vehicles.
- Policy discounts – Car insurance companies will often give discounts to drivers who combine policies, such as home and auto, or who insure multiple vehicles on the same policy.
- Driver discounts – Insurance companies often offer varying types of discounts to drivers who pose less financial risk. You can often find discounts for:
- Being a safe driver/having a clean driving record (3 consecutive years).
- Getting good grades (typically, this means having at least a B average).
- Being over 50 years old.
- Taking driver's education or defensive driving courses.
- Holding membership in an auto club.
- Having a “low-risk" occupation.
- Speak with your insurance company to determine which careers they consider low-risk.
- Driving a limited amount of miles per year.
Comparison-Shopping for Discounts
There are numerous types of car insurance discounts available on the market. You might find in talking to one insurance company that you don't qualify for many (if any) discounts. However, you may speak with another company that has several discounts for which you do qualify.
Shopping around and comparing both the benefits offered and the various discounts is your best bet for finding the policy that best suits your needs and getting cheap car insurance.
Without comparison-shopping for the right car insurance, you can miss out on some incredible savings. You can shop around by:
- Comparing rates online.
- Speaking with an independent agent.
- This person can give you quotes from multiple companies.
- Calling individual insurance companies and speaking with agents from each company.
Remember, the availability of discounts isn't the only important factor when selecting the right policy.
Other Factors to Consider
In addition to auto insurance discounts, you'll also want to make sure the company you choose has the following:
- A strong rating – Insurance companies get an A.M. Best Rating that indicates how likely they are to pay your claim.
- Good customer service – It's a good idea to check your state Insurance Department for complaints against the insurance company. If you find a lot, you might reconsider choosing another provider.
- The right coverage for you – Always make sure to understand the ins and outs of the coverages offered.
- Speak with your car insurance agent to make sure you know what the limits are of each coverage type you select so you'll feel adequately protected in case of an incident.
- Also, make sure you know your state’s car insurance requirements so you purchase the legally required coverage minimums.
- The premium – Even if the car insurance company you speak with offers a whole slew of discounts, they might still charge a premium you can't afford. Make sure you compare car insurance quotes among providers; the gap in price range amongst insurance companies can be significant.
For more information on the types of discounts you might find, explore our Auto Insurance Discounts section.